Expert calls for greater access to credit
Thu, 15 Oct 2009
Additional credit is required to help struggling businesses through the recession, it has been claimed.
Speaking after research by UHY Hacker Young and Trowers & Hamlins revealed that the number of firms facing financial difficulties has increased, David Molian, lecturer in entrepreneurship at the Cranfield School of Management, said lending restrictions were a major contributor to this.
He said money is still not available to small businesses, with the banks being "very unforthcoming".
"I think those businesses which are now going under have been fighting to get in every last penny and protect every last penny and now there is no more cash. So that is probably what explains the rise in the number of businesses going bust," Mr Molian added.
He claimed that the government should do "everything it can" to get credit into the market to prevent further insolvencies.
According to a report by the Institute of Chartered Accountants in England and Wales, more than one in three firms report that access to capital is a greater challenge than a year ago.
Most of those questioned thought that major spending cuts – and possibly tax hikes – will be needed in the next parliament to bring government finances back to health.
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